Buy On Time or Pay Cash

Cost of Borrowing

$1.$

Terms of the loan

a$.$ Amount of the loan

b$.$ Length of the loan $($in years$)$

c$.$ Monthly payment

$2.$ Total loan payments made $($$ per month

Less: Principal amount of the loan

Total interest paid over life of loan

Tax considerations:

Is this a home equity loan?

Do you itemize deductions on your federal tax return?

What federal tax bracket are you in$?$ months$)$

$3.$

$4.$

$5.$ Taxes saved due to interest deductions

$7.($$ $x\%$ Total after$-$tax interest cost on the loan

$8.$

Cost of Paying Cash

$9.$ Annual interest earned on savings

$(6\%$ x

$10.$

Annual after$-$tax interest earnings

$\%$

$5$

$$188\mathrm{.}70$